Before you beat a path to the nearest open house, educate yourself on the homebuying process.
1. Buy less home than you can afford. "Just because we might be able to qualify you for it, doesn't mean you should go for the max," the loan officer says. Leave slack for retirement and college savings. Rather than what you want, consider what, realistically, you need: "We, as Americans, got a little bit egregious as to how much house do you get," he says. "The reality is, you got there and you only needed half of it.
2. Think ahead. Since prices are still dropping, be prepared to stay in your new home at least five years. When prices recover, you should at least break even when you sell. Forget about making a fortune on a home. Those days are probably over for a while. And, if your family is growing, get a home big enough to meet your needs five years out rather than going for granite countertops and high-end upgrades now.
3. Stash the credit. If you don't need the tax credit for a down payment, use it to pay down consumer debt, to start a college fund for your kids or to fatten your retirement account.
Monday, September 07, 2009
Friday, September 04, 2009
Where can you get a home for $150K?
There are 125 metro areas where starter homes cost $150,000 or less – sometimes far less. Learn where the homes are, and how you can buy one.
Believe it or not, you can get into a $150,000 starter home with less than $2,500 in savings. You'll need to leverage the new $8,000 federal tax incentive and have at least average credit, but your monthly payment would work out to about $1,000 a month including taxes and insurance.
According to National Association of Realtors economist Lawrence Yun, starter homes are usually priced about 30% below a local market's median. (The "median" is where half the homes cost more and half cost less.) So the most promising cities for families to buy a first home would have median prices of $215,000 or below (as a $150,000 home is about 30% less than the $215,000 median).
According to the NAR, 125 metro areas had a median price of less than $215,000 at the end of the first quarter; you'll find the list below, plus links to find homes priced 30% below each market's median. In some of these markets, that starter home will cost far less than $150,000.
By Marilyn Lewis of MSN Real Estate
Believe it or not, you can get into a $150,000 starter home with less than $2,500 in savings. You'll need to leverage the new $8,000 federal tax incentive and have at least average credit, but your monthly payment would work out to about $1,000 a month including taxes and insurance.
According to National Association of Realtors economist Lawrence Yun, starter homes are usually priced about 30% below a local market's median. (The "median" is where half the homes cost more and half cost less.) So the most promising cities for families to buy a first home would have median prices of $215,000 or below (as a $150,000 home is about 30% less than the $215,000 median).
According to the NAR, 125 metro areas had a median price of less than $215,000 at the end of the first quarter; you'll find the list below, plus links to find homes priced 30% below each market's median. In some of these markets, that starter home will cost far less than $150,000.
By Marilyn Lewis of MSN Real Estate
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